Why Supreme Cannabis Company Inc (OTCMKTS:SPRWF) Could be at a Tipping Point

Why Supreme Cannabis Company Inc (OTCMKTS:SPRWF) Could be at a Tipping Point

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One stock that has been pulling back a bit in the cannabis patch, and may be worth a closer look as one of the smaller stories with the potential to climb the market share ladder, is Supreme Cannabis Company Inc (OTCMKTS:SPRWF). This is a company that is pushing for increasing production volume and starting to make some waves.

As a case in point, the company just announced that it has obtained Health Canada approval to commence cultivation on approximately 20,000 square feet of additional flowering rooms at its 7ACRES facility. According to the release, “The additional flowering rooms will increase total potential flowering capacity to 90,000 square feet and, assuming a current yield, will bring 7ACRES’ annual production potential from 10,000kg to 13,330kg.”

Supreme Cannabis Company Inc (OTCMKTS:SPRWF) trumpets itself as a Canadian publicly traded company committed to providing premium brands and products that proudly reflect its consumers, people, and uniquely innovative culture. The Company’s portfolio includes its wholly-owned subsidiary and flagship brand 7ACRES.

7ACRES is a federally licensed producer of medical cannabis operating inside a 342,000-square-foot facility in Kincardine, Ontario. 7ACRES is dedicated to providing consumers with a premium-quality product that recognizes its customers are informed, discerning and value a brand and culture that aligns with their principles. 7ACRES brand success has been reflected in provincial supply agreements, where 7ACRES’ product is consistently listed in the highest brand category available to recreational consumers.

The Company’s growing portfolio also includes an equity investment and long-term global distribution partnership with Lesotho-based Medigrow for the exporting of medical-grade cannabis oil.

According to company materials, “the company focuses on the production and sale of medical marijuana in Canada. The company was formerly known as Supreme Resources Ltd. and changed its name to Supreme Pharmaceuticals Inc. in February 2014. Supreme Pharmaceuticals Inc. was incorporated in 1979 and is headquartered in Vancouver, Canada. The Supreme Cannabis Company has consistently set the standard for innovation in the sector, including the design of growing facilities and development of operational excellence metrics. We are confident that together with our flagship brand, proprietary technology and products, truly unique culture, and industry-leading team, we will deliver consistent long-term value creation to our shareholders.”

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As noted above, the company just announced that it has obtained Health Canada approval to commence cultivation on approximately 20,000 square feet of additional flowering rooms at its 7ACRES facility. In all, we’ve witnessed about 41% tacked on to share pricing for the company in the past month, but that move comes in the context of a larger bearish trend.

Furthermore, the name has registered increased average transaction volume recently, with the past month seeing approaching 250% over the long run average.

“As the first coast-to-coast premium cannabis brand in Canada, 7ACRES is already one of the fastest scaling producers in the country.  This flowering room expansion continues to increase our capacity and improve our ability to meet the demand of cannabis enthusiasts upon legalization of adult use cannabis in Canada,” said John Fowler, CEO of Supreme Cannabis.

Earning a current market cap value of $398M, SPRWF has a significant war chest ($78.5M) of cash on the books, which stands against about $12.8M in total current liabilities. One should also note that debt has been growing over recent quarters. SPRWF is pulling in trailing 12-month revenues of $5.3M. In addition, the company is seeing recent top-line growth, with sequential quarterly revenues growing at 23.1%. As more color becomes clear on the name, we will review the situation and update our take. Sign-up for continuing coverage on shares of $SPRWF stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in $SPRWF, either long or short, and we have not been compensated for this article.

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